Series HH Bond
A savings bonds, issued by the U.S. Government, in amounts from $500 to $10.000. These bonds pay semi-annual interests, which is based on a coupon rate and locked in for the first ten years. The bond can be redeemed after just six months of holding it. After holding this bond for the first ten years, the U.S. Treasury resets interest rate in accordance to rates of new bonds issued at that time and the bond enters extended maturity. After beginning of extended maturity, interest rate will fall as low as 1.5%.
As in the case of Series EE bonds, interest on Series HH bonds is exempt from the state and local taxes, but the federal tax must be paid. As from August 31, 2004, Series HH bonds are no longer available for purchase.